Red tape and scandal hurt India's richest, but total wealth grows

October 25, 2012|Reuters

MUMBAI (Reuters) - The corruption scandals and red tape that have hampered India's recent growth took their toll on some of the country's richest in 2012, Forbes magazine's latest rankings showed, though the total worth of the wealthiest 100 inched up in a turbulent year.

The fallout from a telecoms scandal that saw 2G licenses sold illegally in 2008 has rumbled on through this year as the government has grappled with how to re-auction the airwaves.

India's power and coal industries have been plagued by shortages and delays in mining approvals, due in part to greater scrutiny in the aftermath of accusations the government allocated coal blocks to private companies at below-market prices.

Savitri Jindal, chairwoman of power and steel conglomerate Jindal Group, saw her wealth fall $1.3 billion in the year as Jindal Steel and Power subsidiary is alleged to have benefited from those allocations.

The company has denied allegations that it was unduly favoured in the allocation process.

In the 12 months since Forbes released its 2011 list, India's GDP growth rate has slumped to 5.5 percent from 8 percent.

Mukesh Ambani was India's richest man for the fifth straight year, with wealth of $21 billion, Forbes said, even as his Reliance Industries Ltd lost about 7 percent of its market value. ArcelorMittal chairman Lakshmi Mittal was ranked second despite losing $3 billion in net worth since last October.

The biggest climber in the Forbes list was Dilip Shanghvi, chairman of Sun Pharmaceutical Industries Ltd, India's biggest drugmaker by market capitalization, who entered the top five for the first time as his company's share price soared.

The collective wealth of India's 100 richest rose 3.7 percent to $250 billion, Forbes said, with seven people losing more than $1 billion each over the past 12 months but six gaining at least that.

The list includes 61 billionaires, four more than in 2011, Forbes said, as the minimum wealth necessary to enter the list rose 25 percent to $460 million, still below the threshold of $500 million in 2010.